British Smaller

Sophisticated and complex high-risk tax-sensitive investments in small companies: handle with care
runnygum
Posts: 9
Joined: November 4th, 2016, 9:35 pm

Re: British Smaller

Postby runnygum » December 19th, 2016, 9:42 pm

BusyBumbleBee wrote:I am looking at RM DIRECT LENDING RM SECURED IPO which is looking to give a 6.5% yield and seems to be investing in quite small companies



I was semi tempted with this, but high-ish ongoing fee's plus fully taxable probably at income rather than dividend rates made it a wrap for me.

Karellan
Posts: 37
Joined: November 4th, 2016, 2:42 pm

Re: British Smaller

Postby Karellan » December 20th, 2016, 1:13 pm

It transpires that the reason for the late timing of the issue is that they cannot legally have two non-prospectus issues within the same year.

Kidman
Posts: 34
Joined: November 6th, 2016, 1:10 pm

Re: British Smaller

Postby Kidman » December 21st, 2016, 9:09 am

It transpires that the reason for the late timing of the issue is that they cannot legally have two non-prospectus issues within the same year.


K, I'm glad you mentioned that because I had been thinking about the rules, in particular in relation to the DRIS.

My understanding is that a company can only issue EUR 5m of new shares in any rolling 12 month period without issuing a prospectus. I believe this includes any issued by offer for subscription, placing, DRIS etc. Hence, the issue of DRIS shares in January impacts the size of the February offer for subscription. Furthermore, if the EUR 5m has then been used up, a further DRIS during the next 11 months would be impossible. Am I missing something?

naflod
Posts: 26
Joined: November 5th, 2016, 7:40 pm

Re: British Smaller

Postby naflod » December 21st, 2016, 10:52 am

Hi Kidman

DRIS issues are exempt from the prospectus directive per the FCA handbook:

https://www.handbook.fca.org.uk/handboo ... 2015-10-26

Exempt securities – offers of securities to the public
PR 1.2.2R01/04/2013

In accordance with section 85(5)(b) of the Act, section 85(1) of the Act does not apply to offers of the following types of transferable securities:

(1) shares issued in substitution for shares of the same class already issued, if the issue of the new shares does not involve any increase in the issued capital;

(2) transferable securities offered in connection with a takeover by means of an exchange offer, if a document is available containing information which is regarded by the FCA as being equivalent to that of the prospectus, taking into account the requirements of EU legislation;

(3) transferable securities offered, allotted or to be allotted in connection with a merger or division, if a document is available containing information which is regarded by the FCA as being equivalent to that of the prospectus, taking into account the requirements of EU legislation;

(4) dividends paid out to existing shareholders in the form of shares of the same class as the shares in respect of which the dividends are paid, if a document is made available containing information on the number and nature of the shares and the reasons for and details of the offer;

(5) transferable securities offered, allotted or to be allotted to existing or former directors or employees by their employer or by an affiliated undertaking if: ...


Presumably as they are not being offered to members of the public in general and are only available in proportion to existing shareholdings.

naflod

Snowbadger
Posts: 3
Joined: December 21st, 2016, 12:32 pm

Re: British Smaller

Postby Snowbadger » December 21st, 2016, 3:25 pm

Hi everyone! Can anyone explain why the Go Outdoors special is a good thing as the share price dropped by a larger amount on declaration?

Regards,

SB

scotia
Posts: 48
Joined: November 4th, 2016, 8:43 pm

Re: British Smaller

Postby scotia » December 21st, 2016, 4:00 pm

Hi everyone! Can anyone explain why the Go Outdoors special is a good thing as the share price dropped by a larger amount on declaration?


As a result of the sale of Go outdoors there will be a special dividend of 14.5p plus a normal dividend of 2p. Consequently the share price dropped when it went ex dividend.

naflod
Posts: 26
Joined: November 5th, 2016, 7:40 pm

Re: British Smaller

Postby naflod » December 21st, 2016, 5:36 pm

Hi Snowbadger

Before the announcement of the sale of Go Outdoors, which added 3.5p to the NAV, the share price was around 91 - 92p.

Now, ex div for the 16.5p dividends payable next month, the price is 85p.

So, taking the original 92p plus 3.5p NAV gain, less 16.5p dividend, one would expect the price to be 79p now, all other things being equal.

I'm not staying in the DRIS for this as it would have made the combined holdings of British Smaller Cos & 2 of Mrs naflod and I our largest VCT group, topping the Baronsmeads.

Taking the dividends in cash also has the advantages of taking the net cost of our investments in British Smaller Companies to a negative figure and the cash will go towards further diversification into the Pembroke B offer.

I do expect to reinstate the DRIS after the January dividends because of the great value of the NAV -5% issue price.

naflod

Snowbadger
Posts: 3
Joined: December 21st, 2016, 12:32 pm

Re: British Smaller

Postby Snowbadger » December 21st, 2016, 5:45 pm

Cheers Scotia, I realise that was the cause of the drop in share price. I was interested as to why the special was greeted as being a positive by the VCT Lemoneers when the overall drop in share price was greater resulting in a lower TR.


Cheers,

SB

Snowbadger
Posts: 3
Joined: December 21st, 2016, 12:32 pm

Re: British Smaller

Postby Snowbadger » December 22nd, 2016, 3:32 pm

Many thanks Naflod I can see how that works now, so yes a great result and an upgrade forthcoming on the annual ski hol. :)

Cheers,

SB

Mainwaring
Posts: 5
Joined: November 4th, 2016, 7:57 am

Re: British Smaller

Postby Mainwaring » December 26th, 2016, 3:02 pm

Bug8er.....

TAKEOVER PROBE The Competition & Markets Authority is to scrutinise JD Sports' £112.3million takeover of Go Outdoors. The watchdog fears the deal may reduce competition. JD Sports also owns Blacks and Millets.

Very soon British Smaller may have much less cash than we expected....unless they can cancel our Special. Unfortunately, this is widely reported and will delay or stop JD and GO progress.

I wonder who chucked a spanner in this modest deal....? Perhaps a sports direct competitor?

I assume British Smaller will make a statement.
MW

scotia
Posts: 48
Joined: November 4th, 2016, 8:43 pm

Re: British Smaller

Postby scotia » December 26th, 2016, 4:18 pm

TAKEOVER PROBE The Competition & Markets Authority is to scrutinise JD Sports' £112.3million takeover of Go Outdoors. The watchdog fears the deal may reduce competition. JD Sports also owns Blacks and Millets.

Does this affect British Smaller Cos? Maybe I'm missing something - but surely the sale has taken place - and the problem is now firmly at the door of JD Sports. They appear to have been ordered to stop the integration of Go Outdoors with their other companies. I assume that the Competition & Markets Authority, may, at the worst, insist that they divest themselves of certain related holdings, but I would have thought that JD cannot hand Go Outdoors back to its previous owners, and demand their money back - unless of course there was some condition in the sale that permitted this.
But I'm certainly not a company law expert - is there anyone out there that can shed more light on this?

Kidman
Posts: 34
Joined: November 6th, 2016, 1:10 pm

Re: British Smaller

Postby Kidman » December 26th, 2016, 8:53 pm

unless of course there was some condition in the sale that permitted this


it is usual that there is a condition that annuls the transaction if it cannot be completed for reasons such as regulatory issues or failing to win a shareholder vote.

Any merger has to be agreeed and announced before the CMA or the EU authorities can say whether they are going to step in with an enquiry.

To put it another way, this deal has had contracts exchanged, been announced and now awaits completion subject to a variety of conditions being satisfied, including but not limited to, regulatory and shareholder clearance.

Kidman
Posts: 34
Joined: November 6th, 2016, 1:10 pm

Re: British Smaller

Postby Kidman » December 26th, 2016, 9:10 pm

Very soon British Smaller may have much less cash than we expected....unless they can cancel our Special.


At present this is a level 1 enquiry but even that takes time and it could then go to level 2 which will probably take months. The level 1 deadline for a decision has not yet been confirmed.

It would appear to me unlikely that BSV will receive any funds in time to pay the special dividend on the planned timescale and we wouldn't want them to pay out money that isn't distributable in the right time frame. They have done that twice before and we had to get the Board off the hook with a GM resolution each time.

If a special dividend isn't paid, it also puts back the payment of the dividend based 'performance fee' which would become due to YFM, 20% of the dividends paid in a year above a modest hurdle.

What happens if one buys shares now at an xd price and the dividend is then cancelled. The price goes back to a cum divdend price and the buyer gains?

scotia
Posts: 48
Joined: November 4th, 2016, 8:43 pm

Re: British Smaller

Postby scotia » December 27th, 2016, 12:17 am

I must say that all the legal verbalise does nothing but confuse me. The official document on the enforcement order

https://assets.publishing.service.gov.uk/media/585bf26ee5274a13070000ff/jd-sports-go-outdoors-initial-enforcement-order.pdf


refers to the purchase as having been completed (in its bold headline) - and all its instructions are aimed at JD Sports. There are no instructions to GO Outdoors as a separate company

So completed doesn't mean completed?

Retiringat51
Posts: 20
Joined: November 4th, 2016, 6:08 pm

Re: British Smaller

Postby Retiringat51 » December 27th, 2016, 9:29 am

scotia wrote:
So completed doesn't mean completed?


Yes, I mean No.
Depends which QC you ask; James Eadie or David Pannick. Or anyone else you may care to mention.

Thank goodness we will soon be making our own laws again. :lol:

BusyBumbleBee
Lemon Pip
Posts: 56
Joined: November 4th, 2016, 7:55 am

Re: British Smaller

Postby BusyBumbleBee » December 27th, 2016, 10:54 am

Just to cloud the issue even more the Initial Enforcement Order says

Notwithstanding any other provision of this Order, no act or omission shall
constitute a breach of this Order, and nothing in this Order shall oblige
Pentland or JD Sports to reverse any act or omission, in each case to the
extent that it occurred or was completed prior to the commencement date.


The commencement date was 22nd December.

We need that announcement from the board!

scotia
Posts: 48
Joined: November 4th, 2016, 8:43 pm

Re: British Smaller

Postby scotia » December 28th, 2016, 7:52 pm

We need that announcement from the board!

Not a sound was heard from any of the interested parties!
So either (1) The government announcement was sent to the various interested parties by second class mail (or pigeon post)
or (2) All relevant parties are taking a very relaxed attitude - full of Christmas spirit
or (3) They are all so full of Christmas Spirit that they didn't make it to the Office today.

on (3) My daughter recorded that there were many empty seats on the commuter train to the City today

I wonder what tomorrow will bring?

Karellan
Posts: 37
Joined: November 4th, 2016, 2:42 pm

Re: British Smaller

Postby Karellan » December 29th, 2016, 10:08 am

I emailed them some details yesterday which were part picked up. I cannot see that its going to be easy to establish the position. It will probably need the analysis of all sorts of important top people to figure out where we stand.

Karellan
Posts: 37
Joined: November 4th, 2016, 2:42 pm

Re: British Smaller

Postby Karellan » December 29th, 2016, 11:23 am

The response is positive that no RNS is needed and the special dividend will still be paid. QED. My apologies for not getting this to you sooner today but due to an overly complex Chrismas I did not switch my emails on until late.

naflod
Posts: 26
Joined: November 5th, 2016, 7:40 pm

Re: British Smaller

Postby naflod » December 29th, 2016, 2:32 pm

Hi Karellan

The response is positive that no RNS is needed and the special dividend will still be paid. QED. My apologies for not getting this to you sooner today but due to an overly complex Chrismas I did not switch my emails on until late.


No need at all to apologise for any delay; you got on with it, asking the question and getting the reply.

Thanks for your effort

naflod


Return to “Venture Capital Trusts (VCT's)”

Who is online

Users browsing this forum: pbarne and 1 guest